3SOF

GSB analyst update:

Highlights
Since our initiation of coverage in July, the company has been listed on the AMEX and reported a strong Q2. During the three months ended June 30, 2007, GSB set new records of revenue and net income growth. Revenues for the quarter grew to $6,418,025 or 162% over the $2,445,327 from Q2 of last year.
During the quarter, GSB received its largest DOD order ever totaling $2.8 million. Factoring out the DOD order, revenues still grew 51% year-over-year. Net income increased 323% to $2,114,876, or $0.12, fully taxed, on both a basic and fully diluted basis. Since inception in 2003, the company's server-side business has more than doubled each year from $600,000 in 2004 to $2.9 million in 2005, to $6 million in 2006, and will exceed $13 million in 2007. Also in July, the company announced a strategic partnership with a new privately held Alaska-native corporation called Synteras (valued at $1 billion). This partnership increases the company's ability to offer government and commercial clients a proven and scalable solution to assure individual and enterprise information are secure, safe, and retrievable on an around-the-clock basis.
Furthermore, these governmental projects which Synteras is bidding on are in the range of $100 million to $400 million in scope. If just a small part of these projects includes GSB, it could positively impact the company's business.

Our Thoughts
On the Q2 conference call, management reiterated their guidance of $20 million in revenues for 2007. We believe the recent weakness in the stock was due to slower than expected ramp up of the Availl business and that Q3 will be down sequentially from Q2. Furthermore, with momentum investors now out of the stock, we believe there is now a stronger base of investors whom understand there will be some near-term "lumpiness" and over time this will become less of a concern.

We reiterate our OUTPERFORM rating and 12-month target price of $8 based on 25X our 2008 earnings estimate of $0.33, fully taxed.

link:
http://www.andersonstrudwick.com/research_report_pages/07.10-05_GlobalSCAPE.pdf
chart:

Thanks for the always valuable information la-onda (applause)

That text is a nice summary of GSB's fundamental story.

The stock, when looking at the $5.9 all time high and the general market weakness, decided to dive 8.8%, on a 38.2%, almost 50%, Fibonacci retracement, which is a healthy correction. No big deal as far as I'm concerned.

I think GSB should achieve $8 before 12 months because it should have a higher than 25 forward earnings multiple, to be in tandem with other companies in the same sector, like RVBD, for example, which trades at 59 times 2008 EPS estimates.

If GSB were to trade at 59 times the $0.33 2008 EPS estimate, it would be trading at $19.47

I'll continue holding GSB for the long term.

GSB is just taking a breather, I have no doubts it will make a bullish breakout above $5.9 anytime soon. I just love the company's products and I'll continue holding GSB for the long term.

GSB is about to challenge the all time high at $5.9 and in my view, it will surpass it. I still haven't given up on my expectation for $8 a share on year's end. And there's no need of positive news to do it, multiple expansion is enough. But of course, I'll welcome positive news if it happens.

I'll keep holding GSB for the long term.

GSB continues to challenge its all time high at $5.9 without any news release out. We've already seen that just multiple expansion can take GSB towards $8 still in 2007.

Instead of being stopped out at break even I now have a 50% profit to show. But it doesn't always happens this way, of course. I think fundamental analysis has its value, and technical analysis also has value, even though I've been moving more and more towards being a fundamental analyst instead of a technical one, because I need long term analysis tools to be a long term investor. 

Fundamentally, it appears to me that the best is yet to come for GSB and I'll keep holding the stock for the long term.

GSB closed at a new all time high with volume above average. This doesn't tell me much, as the 50% drawdown in mid-August didn't mean anything ... I need to be coherent in my analysis.

I don't know if GSB is moving higher simply because of multiple expansion or because there's positive news pending. I hope it is just multiple expansion, so that we don't get another violent "sell the news" phenomenon.

I see $8 a share before 2007 closes and much more thereafter. I'll continue holding GSB for the long term.

...i think we have a confirmed breakout. 

The baby is back in the right channel. Welcome back, you lost soul! 

finally rewarded for patience! next...CIMT!

David, I know you dont like to get too excited when things go well, but for today at least allow yourself the indulgence of looking in the mirror and saying " I'm the MAN!!!" 

Up 4.5% on a FULLY invested portfolio in just one day where the markets were basically flat, that is outstanding, applaud! 

Great job, David!
Now we need to work hard to make sure Wall Street does not claim our earnings back. 

Quote from: tokyopua on October 18, 2007, 04:08:26 PM
David, I know you dont like to get too excited when things go well, but for today at least allow yourself the indulgence of looking in the mirror and saying " I'm the MAN!!!" 

Up 4.5% on a FULLY invested portfolio in just one day where the markets were basically flat, that is outstanding, applaud! 

You're a nice guy Tokyopua, thanks for your kind words

But never, the day I do that, I'll be lost. As losses don't diminish me as a person, profits don't make me greater either. I'm exactly the same man when I lose or win.

Even though I love studying and investing in the stock market, I'll never let it rule my life again.

Going for a karate class now, see ya

Didn't have karate class, the Sensei didn't show up, but it was for a good reason: He just came back to Portugal from a tournament in London where he became Champion of the World

Going back to the stock market and our little issue, I remember perfectly when, five years ago, I made my first $100 K in the stock market. Man, I felt like I was the king of the world, as I was driving my Porsche to sunset. I felt I knew it all, about the market and life. I was the Master!

Six months later I was broke. Got depressive. Cried many nights, as I couldn't make my money back ... I felt like a failure.

On a much bigger scale, you guys should learn about Livermore's life. At several points in his life he was one of the top 10 richest men in the world. He was also broke several times. Every time he was on top he thought he finally had figured out the game and felt like "the MAN". He loved smelling his millions and the importance money brought him. In a sentence, he was more of a man when he was rich than when he was poor.

After 40 years plus in the game and as he was broke (again), he shot himself and left the following suicide note:

I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure!

To never feel like "a failure", you can never feel like "the MAN". This is the most important lesson I've ever learned about the stock market and life and now I'm passing it on to you. Take it in your heart in every moment and you'll live a much happier life. You take care

Quote from: David Randolph on October 18, 2007, 05:59:56 PM
Didn't have karate class, the Sensei didn't show up, but it was for a good reason: He just came back to Portugal from a tournament in London where he became Champion of the World

Going back to the stock market and our little issue, I remember perfectly when, five years ago, I made my first $100 K in the stock market. Man, I felt like I was the king of the world, as I was driving my Porsche to sunset. I felt I knew it all, about the market and life. I was the Master!

Six months later I was broke. Got depressive. Cried many nights, as I couldn't make my money back ... I felt like a failure.

On a much bigger scale, you guys should learn about Livermore's life. At several points in his life he was one of the top 10 richest men in the world. He was also broke several times. Every time he was on top he thought he finally had figured out the game and felt like "the MAN". He loved smelling his millions and the importance money brought him. In a sentence, he was more of a man when he was rich than when he was poor.

After 40 years plus in the game and as he was broke (again), he shot himself and left the following suicide note:

I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure! I'm a failure!

To never feel like "a failure", you can never feel like "the MAN". This is the most important lesson I've ever learned about the stock market and life and now I'm passing it on to you. Take it in your heart in every moment and you'll live a much happier life. You take care

I did recall your story about making that money then going broke, so that is in part why I was sort of tounge and cheek saying this, I knew you wouldnt take the opportunity to gloat, but still wanted to make you smile nonetheless.

I am a bit of a hedonist by nature, so I think I still allow myself to be happy about good things, but dont worry overly much about bad things.  Nor do I think Im invincible when things are going good, rather I realize that is when one can be most vulnerable. 

For example, last week on the big up day my portfolio was up 7.5%.  I was happy, but unlike a year ago I didnt go out and start buying things to celebrate or whatever, I just let the feeling energize me for other pursuits.  Moderation in everything.

Anyway, that is just my approach, I am still amazed at you being a master of what we call "state control" in NLP.   With that kind of discipline, you will surely become a master of karate as well, and sounds like you have an awesome sensei as well.  We have something in common there, in Japan I studied under an 8th degree judo black belt who was twice world champion.  He was twice my age almost, about 15 Kg less weight than me and shorter by about 12 cm, but used to simply throw me almost effortlessly during the few times I had the honor to spar with him.   Simply amazing mastery, awe inspiring actually...

Unlike you, tokyopua, I usually experience wild mood swings. I feel euphoria when things are splendid and begin to spill negative energy when things turn sour. By patiently studying and using David's techniques, I feel a lot better about many other things in life now. Since here we deal with the polygamy of human psychology, so to speak, the experience can apply to other aspects in life. For instance, I learn to be more resolute and take action when necessary, without procrastination. Fight the devil of uncertainty inside my left lobe when the right lobe dictates "go".

Last week could completely relax while traveling in Bavaria with the family and not worry about what the stocks are doing. Just told myself, "they are all sound investments, carefully chosen and monitored by David, so take it easy." It worked.

Our current dream (mine and my wife's - and we always have one in store  ) is to move to Munchen, Germany from Massachusetts. When I tell her our $$$ savings go down, while Euro keeps going up, she looks at me as if I were dumb and says, "we'll make a lot of money and move to Germany." She says it as if it is obvious and can't go any other way. I enjoy the feeling of believing her. If she is so sure, why can't I be? Hedonism, ha? - sounds good!